1. Field of the Invention
The present invention relates to systems used to detect fraudulent applications and more particularly to an automated system that detects fraudulent applications by first comparing information found within the application with a separately maintained database of contact information and then contacting the applicant to confirm that the application is valid.
2. Description of the Prior Art
Over the years, identity theft has become the top consumer complaint reported to authorities, according to the Federal Trade Commission. The electronic age of information has provided faster electronic communications and greater access to a wide range of personal information. Moreover, in response to various economic conditions and consumer spending trends, businesses have provided greater access to credit. These and other factors have caused the incidence of application fraud to dramatically increase.
Typical application fraud may be limited in scope, where someone obtains an individual's personal information, such as the individual's name, address, social security number, mother's maiden name and other such information in order to fraudulently open a credit card account. Other incidences of fraud can be much more broad in scope. For example, a group may attempt to defraud hundreds of creditors using fictitious applicant information to obtain credit and other services offered through publicly disseminated applications. Overall, application fraud costs businesses across the world several billion dollars each year. These losses are typically passed to the consumers, by way of higher prices and fees for many different goods and services.
Various organizations and businesses have developed methods of fighting losses due to application fraud. The difficulty comes in associating the identity and credit file of an individual with the identity being presented in the application. Many prior art methods require manual security and credit checks. However, such manual checks are prone to human error, and even when accurate, become costly expenditures of time and money. Some prior art methods use complex statistical models and trends in an attempt to make an educated guess as to whether or not an application is fraudulent. Other prior art methods include a heavy reliance on credit bureaus and other fraud information services. However, the databases maintained in these systems may be updated sporadically and, oftentimes, it may take weeks or months for reported problems or incidences of fraud to appear in the databases.
Accordingly, what is needed is an automated system and method for determining fraudulent applications that automatically compares application data with an accurate identification database that is continuously updated. Such a system should also provide an automated manner of contacting the applicant to verify the applicant's identity and that it was the applicant who submitted the subject application. However, such as system should be capable of updating its own database and connecting the applicant with a live customer service representative to rectify database irregularities or report a potentially fraudulent application.